Data Integration Blog -

Your insurance company helps protect itself from excessive risk on big losses (hurricanes, floods, etc.) by buying reinsurance.  This is how they can cover you and the rest of their policy holders with confidence that a big event won’t sink them financially.  According to an August 25^th MarketWatch column, data quality plays a big part in how that reinsurance is priced.

“Nearly all reinsurers (90%) acknowledge that they apply surcharges to compensate for data quality deficiencies, and among these 70% say they would include a 20-25% premium penalty. Additionally, more than one third say they would be willing to offer a minimum 10% premium credit for cedants with high quality data.”

Analogous to the Adaptive Market Hypothesis about data quality and availability in financial markets, this article shows that data quality is also a key to helping reinsurer’s confidence in understanding risk so they can properly price their reinsurance.  Data Quality tools like Pervasive Data Profiler empower analysts to understand and validate their datasets.  Reading this article helped me see bigger the problem space of data quality that Data Profiler helps to solve.

Published Aug 27 2008, 02:48 PM by Michael Kuhl